We Think Some Shareholders May Hesitate To Increase Blackstone Minerals Limited's (ASX:BSX) CEO Compensation

Blackstone Minerals Limited (ASX:BSX) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 25 November 2022. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for Blackstone Minerals

How Does Total Compensation For Scott Williamson Compare With Other Companies In The Industry?

Our data indicates that Blackstone Minerals Limited has a market capitalization of AU$85m, and total annual CEO compensation was reported as AU$617k for the year to June 2022. That's a notable increase of 54% on last year. In particular, the salary of AU$360.9k, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below AU$301m, reported a median total CEO compensation of AU$371k. Hence, we can conclude that Scott Williamson is remunerated higher than the industry median. What's more, Scott Williamson holds AU$1.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	AU$361k	AU$285k	59%
Other	AU$256k	AU$115k	41%
Total Compensation	AU$617k	AU$400k	100%

Speaking on an industry level, nearly 60% of total compensation represents salary, while the remainder of 40% is other remuneration. Although there is a difference in how total compensation is set, Blackstone Minerals more or less reflects the market in terms of setting the salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Blackstone Minerals Limited's Growth Numbers

Over the last three years, Blackstone Minerals Limited has shrunk its earnings per share by 23% per year. In the last year, its revenue is down 54%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Blackstone Minerals Limited Been A Good Investment?

Boasting a total shareholder return of 57% over three years, Blackstone Minerals Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which is concerning) in Blackstone Minerals we think you should know about.

Important note: Blackstone Minerals is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.